As we all know, wages and payroll taxes are essential to life, to healthcare and to aging well. In Spain, as in any other country, once an individual starts to work, he is required to contribute then and for the rest of his career.

How to better understand the social charges in Spain

In accounting, the net salary is the remuneration paid monthly to an employee´s bank account. In reality, this salary is only part of what the employee actually costs the employer. The difference between the total cost of an employee’s work and his net salary is equal to the set of “social charges”. These charges are used to finance social protection system and to cover a number of risks such a health, pension, unemployment etc.

Employee social charges in Spain: who pays them and what is the rate?

In Spain, anyone in paid employment must be insured. That said, the employer must report monthly compensation paid to the employees at the Tesorería General de la Seguridad Social (collection agency) as well as the exact number of hours worked. The payroll tax is calculated for each employee and the employer is notified of the total amount of charges for both the employer and the employee. Salary payroll taxes owed by employees are directly deducted from their salary by their employer, a percentage of 4.70% of gross salary. However, unemployment insurance of 1.55% for permanent employees must be added to this. On top of that, another 0.10% is added for vocational training. The wage share would therefore be 6.35%.

How can one benefit from Workers Compensation Insurance?

Every employee, regardless of the type of employment contract, is considered to be under the control of his employer for the duration of the working day. The employee therefore enjoys protection against any accident happening at work even if it had nothing to do with the work itself. The same applies if an employee is out on a project outside of business, any accident occurring during working hours are still covered by this regulation. The employee´s company is obliged to pay contributions for work accidents as such. The organisation in charge of Social Security for work accidents and professional illness is the Instituto Nacional de la Seguridad Social (INSS) and it hinges on the Secretariat of State for Social Security at the Ministry of Labour and Social Security.